FMC seeks more details on TSA-WTSA merger plan

Tuesday, February 05, 2013

The U.S. Federal Maritime Commission is asking the Transpacific Stabilization Agreement (TSA) for additional information about its plan to expand its scope to include not only the inland container trade from Asia, but also outbound trade from the United States to Asia.
TSA is a discussion agreement of 15 container carriers that move more than 90 percent of the cargo from the Far East and Indian Subcontinent to the United States.
In December, it filed an amendment that would expand the geographic scope of the agreement to include the full roundtrip transpacific trade, adding the trade from the United States to the Far East, effectively subsuming the Westbound Transpacific Stabilization Agreement, a smaller group that included eight of the TSA members.
The FMC said its request for additional information prevents the change to TSA becoming effective as originally scheduled. It has asked interested parties to file comments within 15 days of Feb. 5, when it published the notice of its request for additional information in the Federal Register.
The FMC could also ask for a modification of the agreement, or if it felt the change would unreasonably increase rates or decrease service, seek to delay it through an injunction though the commission has rarely taken that step.
Karen Gregory, FMC secretary, noted in December that "since these are two important talking agreements and encompass the majority of U.S. containerized trade, the commission is definitely going to give this proposal its highest level of examination.”
When the plan was announced TSA Executive Administrator Brian Conrad said streamlining the agreements and cutting cost is the primary purpose of the filing. He noted nearly all other major trade lanes with carrier agreements are represented by a single group which includes the entire roundtrip trade in its scope.
“The same lines carry the cargo in both directions on the same vessels, as part of their round-trip service rotations,” Conrad said. “Since they operate their business on a roundtrip basis, it only makes sense to view the two segments as an integrated whole from an agreement perspective as well.” - Chris Dupin